Your Financial Resolutions for the New Year

A person planning their finances on their pc and calculator

As we bid farewell to another year and embrace the promise of a new one, it's the perfect time to reflect on our financial well-being. Just as we set goals for our personal growth and professional aspirations, it's crucial to establish financial resolutions that align with our long-term financial goals. 
Financial resolutions are not about quick fixes or drastic changes; they are about making sustainable and meaningful adjustments that will positively impact our financial health in the long run. By taking small, consistent steps and seeking guidance when needed, we can set ourselves up for financial success in the new year and beyond.

Here are some practical financial resolutions to consider for the new year, accompanied by actionable insights to guide you on your financial journey:
1. Create a Budget and Stick to It:
A budget is the cornerstone of financial management, providing a clear picture of your income and expenses. Without a budget, it's easy to overspend and lose track of your financial goals.

  • Start by tracking your income and expenses for a month to understand where your money is going.
  • Use a budgeting app or spreadsheet to categorize your expenses and create a realistic budget that allocates your income towards essential expenses, savings, and discretionary spending.
  • Review your budget regularly and adjust as needed based on changes in your income or expenses.

2. Prioritize Debt Repayment: Tackle Your Holiday Debt
Holiday spending often leads to an increase in debt. Prioritize paying off debt to minimize the overall interest you pay.

  • List all your outstanding debts, including the amount owed, interest rate, and minimum payment.
  • Consider using a debt payoff method, such as the debt snowball or debt avalanche method.
  • Make extra payments on your debt whenever possible to accelerate your debt repayment journey.

3. Build an Emergency Fund: Your Financial Safety Net
An emergency fund provides a safety net for unexpected expenses, such as car repairs, medical emergencies, or job loss. Aim to save at least 3-6 months of living expenses in an easily accessible account.

  • Open a dedicated savings account specifically for your emergency fund.
  • Automate your savings by setting up regular transfers from your checking account to your emergency fund account.
  • Start by saving small amounts, even if it's just $25 or $50 per month, and gradually increase your contributions as your financial situation improves.

4. Embrace the Power of Savings: Secure Your Financial Future
Saving consistently is crucial for achieving your long-term financial goals, such as buying a home, funding your retirement, or educating your children.

  • Set specific savings goals for each of your long-term objectives.
  • Consider utilizing employer-sponsored retirement plans, such as 401(k)s, to take advantage of tax benefits and employer contributions.

5. Invest for Your Future: Grow Your Wealth
Investing in the stock market, real estate, or other investment vehicles can help your money grow over time and build wealth for your future.

  • Educate yourself about different investment options and choose those that align with your risk tolerance and financial goals.
  • Consider seeking guidance from a financial advisor to create a personalized investment plan tailored to your specific needs and objectives.

6. Safeguard Your Assets: Ensure Adequate Insurance Coverage
Ensure you have adequate insurance coverage to protect your assets and yourself from potential risks.

  • Review your homeowners, health, and life insurance policies annually to ensure they meet your current needs and consider increasing coverage as your circumstances change.
  • Consult with an insurance agent to explore different coverage options and ensure you have adequate protection for your specific assets and risks.
  • Keep your insurance policies up to date and make necessary adjustments as your life evolves.

7. Enhance Your Creditworthiness: Improve Your Credit Score
Your credit score plays a significant role in your financial life, influencing interest rates, loan approvals, and even job opportunities.

  • Obtain a copy of your credit report from AnnualCreditReport.com to review your credit history and identify any errors or inaccuracies. You can also quickly find your FICO® score at Personify after logging in.
  • Make all bill payments on time to avoid late payments that negatively impact your credit score.
  • Use credit responsibly and try to pay off your balances in full each month to avoid accruing interest.

By implementing these strategies, you can improve your credit score and enhance your creditworthiness, opening doors to better financial opportunities and a more secure financial future.

Disclaimer: The material presented here is for informational purposes only and does not represent specific financial advice to you or your circumstances personally.
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